Ann: Appointment of Corporate Development Officer, page-6

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19/12/17

10:43

Post #: 29731469
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Originally posted by MIStragic ↑

The new CDO had a similar role at Mt Gibson Iron (when Cool Hand was MD?). MGX is currently trading below cash backing .... dare I say it should be a bargain but the market is not buying ??
Reading WGX December Update presentation reveals that WGX is cheap on a number of metrics, but SLR is the cheapest of the peer group that WGX compares itself too .... hmmm.
The average EV/ox produced was $3580, with NST = $5000/oz produced, SAR $3,800/oz, RSG $1800/oz, WGX $1737/oz and SLR $900/oz ..... hmm.
The average EV/EBITDA was 4.84 with RRL = 6.8, NST = 6.0, SAR = 5.0, SBM = 4.0, WGX = 3.5 and bringing up the rear SLR = 1.5 !
Now both WGX and SLR have higher AISC's than NST etc, and both have shorter mine life, but unlike WGX, SLR has not been diluting shareholders with CR's and has a higher proportion of UG mines which are harder to establish reserve estimates for .... So, it would appear that SLR even with the known caveats is very cheap compared to its peer group. Let's hope the new CDO position is not a mere sinecure and that he can justify his generous salary package by effectively pointing out SLR extreme valuation gap .... before WGX or some other corporate vulture engages in a SLR-funded takeover of SLR.
SLR would look even better value with a whole layer of management and corporate costs removed.

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The thing is SLR have been undervalued for sometime.

The only way they will get a rerate is if they become more transparent and either takeover MGV completely or pull out and use the funds elsewhere.

SLR Price at posting: 33.0¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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Ann: Appointment of Corporate Development Officer, page-6

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